Precisely how do the APC and the MPC differ? Why must the sum of the MPC and the MPS equal 1? What are the basic determinants of the consumption and saving schedules?

Question

Olive Petersen

Social Studies

31 July, 03:58

Precisely how do the APC and the MPC differ? Why must the sum of the MPC and the MPS equal 1? What are the basic determinants of the consumption and saving schedules?

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Sage Wallace · Answer 1

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Explanation:

The median propensities to consume and save explains the fractions that are present in any total income that are consumed and saved, it also reveals the relationship between the total/average income consumed and saved; APC + APS = 1.

The Marginal propensities to consume and save illustrates the contrasts of any modification in total income that are consumed and saved; MPC + MPS = 1